Portugal doesn't need bailout funds boost: Junker

9th November 2011, Comments 0 comments

Portugal, one of three eurozone countries to receive a EU-IMF bailout, does not need more money to address its debt burden, eurozone chief Jean-Claude Juncker said Wednesday.

EU, IMF and European Central Bank officials are currently in Lisbon to review progress under the 78-billion-euro ($57 billion) bailout deal agreed to in May, which requires stiff austerity measures in order to balance the public finances.

"I don't think Portugal needs a higher amount than the 78 billion. I'm convinced this is not needed, but I would be against increasing this amount," said Jean-Claude Juncker, who heads the group of eurozone finance ministers.

"There will never be a euro without Portugal," Junker added following a meeting with Portuguese Prime Minister Pedro Passos Coelho.

Coelho's centre-right government has previously called on the EU, IMF and ECB to adjust the terms of the deal, but has not called for more funds.

"Some technical adjustments are needed but not any major adjustments... I can't say we would be in favour [of] less efforts or more money. The targets have to be respected", Junker said.

Lisbon needs the all clear from the EU, IMF and ECB to receive the next 8-billion-euro loan installment.

Under the terms of the deal, Portugal needs to reduce its public deficit from 9.8 percent of Gross Domestic Product in 2010 to 5.9 percent by the end of 2011, but it stood at 8.3 percent earlier this year, putting that objective in doubt.

Passos Coelho government's has already tabled a tough 2012 austerity budget, but the spending cuts that have already been executed pushed the economy into recession, making achieving its recovery targets even more difficult.

"We are very happy with Portugal's efforts," Junker said.

© 2011 AFP

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